Down at the shops trade is grim. You couldn't sell a sofa to a super rich man who hasn't sat down for a month or flog a new frock to a naked fashionista. But look at the retailers' shares and you might think shoppers are queueing round the block. There is, as they say, a "disconnect" between what is happening down the high street and what is going on down at the Stock Exchange.

A new update on the traffic through the tills was released overnight by the British Retail Consortium. March, it turns out, was another dismal month, with like-for-like sales down 1.2% compared with March last year.

The consensus was for slightly worse numbers, but it was an odd month. Easter is the second biggest shopping season of the year and we have been having unusually good shopping weather (not too hot, cold or wet). Nevertheless there are real pockets of gloom: furniture spending was the worst this decade, despite huge discounts. Indeed, the main message from the figures is that sales of non-food goods continue to be battered - down 4.3% in the first three months of the year, while food is steaming ahead, up 4.7%. Odd, then, that non-food retail shares have been roaring ahead quite so dramatically. Take M&S (up 43% since the end of 2008), Next (up 28%), Kingfisher (up 18%), Halfords and HMV (both up 29%) and DSG (+97%). A quick glance at 14 of the leading quoted retailers shows an average gain of some 50% since 1 January.

Debenhams, which at Christmas some analysts thought was on Death Row, has more than doubled, from 24.5p to 52.5p. JJB, which is definitely on Death Row but praying for a last minute reprieve, is up 260% (though still a dire 14.25p). At the same time shares in the recession-beating supermarkets are all down - between 6% and 12%.

How so? The theory is fund managers ditched non-food retailers in a panic when the economy nosedived. Now they glimpse signs of stability, don't want to miss the bottom and are scrambling to rebuild their positions in order to restore balance to their portfolios.

The supermarkets, meanwhile, have not underperformed, they have just mirrored the market (the FTSE is down 10% since the turn of this year).

The fact remains that consumer confidence is still shattered, and while some homebuyers are massively better off because of lower mortgage rates, that impact is more than offset by rising unemployment. The grim sofa sales figures alone prove that. Investors tempted into the non-food sector now must be brave. If they think recent gains are setting the pace for future growth, they must be mad.

O'Leary's law

The credit boom gave carriers such as Qantas and BA a smooth journey for years, as bankers reclined on flat beds for the premium fares that generate the bulk of profits for traditional airlines. The latest BAA passenger numbers show why airline earnings have now hit an air pocket: traffic on North Atlantic routes, the financiers' favourite flight path, slumped 18% in March.

Without that trade, the business models for long-distance fliers is vulnerable. Premium bookings are down some 15% worldwide. BA is looking at a second successive year of losses, while Qantas is on its third round of job cuts after cutting profit expectations by 80%. Ryanair's Michael O'Leary has made more money than the average banker from challenging arcane assumptions about air travel - that people will not pay to fly to obscure destinations with zero service. Time to stretch that theory over a longer distance maybe?

Phorm and failure

Amazon scored a PR hit yesterday by opting out of technology developed by UK-based Phorm, following recent noises from Google and Bebo that they may back out. If the internet has a devil, in the eyes of the digerati, it is Phorm. It allows internet service providers to track what their customers are doing, so websites can send them relevant adverts. The word "snooping" is often linked to Phorm; the reality is not so black and white.

Some of the biggest names on the internet, such as Google and Yahoo, already track what their users do to send them better adverts.

Amazon doesn't want activity on any of its sites to be monitored by Phorm. But it still collects lots of information about visitors to its website - that list of recommendations is not guesswork. It comes from the mountain of data.

Phorm's system will be opt-in for web users. Everyone else works on the premise that just because you have visited their site, you agree to have your data captured. You have to opt out. Opening up a wider debate about privacy is a threat to the big boys of the online world; they would prefer Phorm to fail.